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Interim financing
Also called bridge financing, swing loan, interim loan.
Temporary funding taken against a specific, identified source of repayment that has not arrived yet — a closing, a collection, a settlement, a refinance.
Drafted with AI assistance. Not yet independently checked. Nobody has verified the claims on this page against a source, so treat the figures and legal points as a starting point rather than as settled, and confirm anything you are about to act on. How we check things.
What it means
The defining feature is a named takeout. Interim financing is not general-purpose borrowing that happens to be short; it is money advanced because everyone can point to the event that will repay it and roughly when.
Common situations
- An SBA loan is approved but closing is weeks away and the seller will not extend
- A property purchase must close before the existing property sells
- A large receivable is confirmed but on long terms
- An insurance settlement or tax refund is determined but unpaid
- Equipment must be ordered and deposited on before the lease funds
How it is structured
Short stated maturity, often interest-only with everything due at the end, priced above permanent financing, and secured by whatever the takeout will pay off — frequently a first lien on the specific asset, sometimes an assignment of the expected proceeds. Extension provisions and extension fees are normal and should be read before signing rather than at maturity.
Against permanent financing
Interim money is a timing tool. Where the underlying need is structural — the business is short of working capital every month, not this month — interim financing solves nothing and adds a maturity date to an existing problem.
Where this one catches people
Takeouts slip, and interim lenders price on the assumption they will not. When the SBA closing moves by six weeks, the borrower is in a poor negotiating position: the interim lender knows the takeout exists, knows the borrower cannot afford to default in front of it, and prices the extension accordingly. Where the interim lender holds a lien, it also holds a veto over the closing it is bridging to, because the takeout lender needs clear title or an agreed payoff.
Where you will meet this term
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Interim financing — common questions
What does interim financing mean?
Temporary funding taken against a specific, identified source of repayment that has not arrived yet — a closing, a collection, a settlement, a refinance.
Where does interim financing catch people out?
Takeouts slip, and interim lenders price on the assumption they will not. When the SBA closing moves by six weeks, the borrower is in a poor negotiating position: the interim lender knows the takeout exists, knows the borrower cannot afford to default in front of it, and prices the extension accordingly. Where the interim lender holds a lien, it also holds a veto over the closing it is bridging to, because the takeout lender needs clear title or an agreed payoff.
Is interim financing the same as an interest rate?
Interim financing is defined above; if you are comparing it against a rate, check whether the two measures share a time dimension before you put them side by side.
Which products does interim financing apply to?
Working Capital, Term Loan, SBA Loan, Asset-Based Lending.
Is there a worked example of interim financing?
Not on this entry. Where a term is arithmetic, the arithmetic is shown; this one is not primarily a calculation.
What else should I read alongside interim financing?
Balloon payment, Gap financing, Hard money loan, Interest-only, Letter of intent.
Has this definition been checked?
Not yet. This entry is drafted and live, and the notice at the top says so. Confirm anything you are about to act on.
Is this legal advice?
No. It is a definition. What a clause does in your contract, in your state, is a question for a lawyer licensed where you are.
Can I suggest a term?
Yes — [email protected]. The glossary grows from what people are actually shown in contracts.